• REA responds to Government’s announcement of a new Energy Prices Bill;
• The Bill will legislate for a temporary “Cost-Plus Revenue Limit” on power generators in the UK, acting as a cap on the revenue that renewable generators can receive;
• The REA expresses concerns that this policy risks undermining investment and certainty at just the time when record investment is needed to reach Net Zero.

The Association for Renewable Energy and Clean Technology (REA) has responded to Government’s announcement of a new Energy Prices Bill that will legislate for a temporary “Cost-Plus Revenue Limit” on power generators in the UK, acting as a cap on the revenue that renewable generators can receive. The REA says that this policy risks undermining investment and certainty at a time when renewable energy and clean technology investment in crucial to achieving Net Zero.

The exact scope of the cap is yet to be determined, however has been described publicly as applying to projects not already on a CfD. The REA will be watching extremely intently for further information and urges the Government to provide immediate clarity. Currently not knowing even a ballpark figure for the cap is causing undue concern for thousands of generator businesses across the UK.

Furthermore, any measures on renewable energy and clean technology generators must be commensurate with the arrangements on oil and gas companies, who face a 25% profit (not revenue) levy but one they can offset against investment. It is imperative that there is the same investment support for renewables, to achieve Net Zero and the Government’s plans for growth and levelling up.

Dr Nina Skorupska CBE FEI, Chief Executive at the Association for Renewable Energy and Clean Technology (REA), said:

“We know that the current energy crisis has led to previously unthinkable measures in the market, and that every sector needs to play its part – however, this policy risks undermining investment and certainty at just the time when record investment is needed to get us to Net Zero.

“Any measures on the renewable energy and clean technology generators must be commensurate with the arrangements on oil and gas companies, who face a 25% profit (not revenue) levy but one they can offset against investment. The REA calls on Government for the same investment support for renewables.

“Much will depend on the final price set and which projects fall within the scope. We are also adamant that fuelled generators should have a different price set based on their circumstances and that any cap must take into account the significant inflation in costs of the past six months.

“The REA has already made these points clear to Government and will continue to work closely with Government on our members’ behalf.”

—ENDS—